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Parties Say They Are Close To New Jersey Budget Deal

After days of public quarrels and recriminations, Democratic and Republican leaders of the New Jersey Legislature said early this morning that they were confident that they could reach agreement on a state budget before the deadline at midnight tonight.

At 12:01 a.m., emerging from Gov. James E. McGreevey's office, Richard J. Codey, the Democratic co-president of the State Senate, said, ''We're just a lot closer now than we were four hours ago.''

With him were John O. Bennett, the Republican president of the Senate, and Albio Sires, the speaker of the Democratic-controlled General Assembly.

The three declined to say which issues had been resolved. But the special session called this weekend, after weeks of deadlock, seemed to take a turn on Sunday night.

The Republicans in the evenly divided State Senate, who had objected to the new or increased taxes in Mr. McGreevey's $24.1 billion proposed budget, announced Sunday evening that they were willing to provide the one vote needed to pass eight of the 10 tax measures in that package. And Mr. McGreevey said in response, ''This has been a seismic shift, an important shift, namely, the concept that there has to be a balanced budget.''

Earlier, statements by Senate leaders were not much more hopeful than the parting shots they made Saturday night, when they broke off talks. At that point, Democrats said Republicans had yielded nothing in their dispute over the tax bills, totaling $800 million to $900 million.

Last night, after the six Republicans on the Senate Budget Committee took their chairs at a committee meeting that the Democrats boycotted, Senator Leonard Lance, a Republican, said, ''We've met the governor more than halfway.''

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Within the hour, Senator Codey, the Democratic co-president of the Senate, said that the two sides were still hundreds of millions of dollars apart and that cutting that amount from the budget ''would bring disastrous effects on school aid, prescription drugs for seniors, I could go on and on and on.''

The bargaining proceeded in the recesses of the governor's offices, where the main players -- including the budget committee chairmen and the state treasurer -- have been in rotating talks for nearly a week.

The Republicans said Sunday night that they would provide the one vote needed to approve a 55-cent increase in the cigarette tax, a 7 percent hotel and motel tax, a tax on billboards and several other fees. A tax on casino profits remains in dispute, since Senator William L. Gormley, the Republican who represents Atlantic City, has objected to the Democrats' formula for calculating it.

The Republicans refused to support taxes on telephone service and real estate sales.

Earlier, as lobbyists, reporters and stray legislators gathered to hear the Republicans in the cavernous committee room, David Rebovich, a political science professor at Rider University, said the budget dispute ''is in a way the craziest'' he had seen in 25 years. ''They're 1 percent apart,'' Mr. Rebovich said. ''Why don't they just split the difference?''

Then he added: ''They're trying to solidify their campaign themes, and it looks like they'll do so for at least one more day. They'll get one more day of headlines.''